1.3.4 Distribution

Distribution channel

📌 How a product moves from the producer to the customer

The Four-Stage Distribution Channel

• Wholesalers are likely to buy in bulk, benefit from economies of scale, able to charge lower prices
• Less control for the business, a price may be set that doesn't reflect the business' intentions, change in customers' perception of the business, loss of customer satisfaction

The Three-Stage Distribution Channel

• Less control for business, a price may be set that doesn't reflect the business intentions, change in customers' perception of the business, loss of customer satisfaction

The Two-Stage Distribution Channel

• More control over price, able to set prices that maximise personal objectives such as profit maximisation or sales maximisation
• May be difficult to gain exposure without intermediaries such as retailers, customers may choose competitors with a stronger brand image

Changes In Distribution To Reflect Social Trends:

• Online distribution
• Changing from product to service